event 09 Apr 2020

Publication // Economic Development of Rural Communities in Sub-Saharan Africa through Decentralized Energy-Water-Food Systems

By Winklmaier, J., Santos, S. A. B., & Trenkle, T. (2020). This paper focuses on the concept of decentralized energy-water-food systems, implemented for a case study in a rural community in Ghana. The following evaluation of the concept reveals potential economic and financial benefits for stakeholders involved.

category Research Papers, Publications and Books globe Africa globe Frexus Project / Sahel
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Decentralized energy-water-food systems (EWFS) propose a sustainable mechanism to improve living conditions in rural communities with the supply of electricity, water, and food using renewable resources and catalyze community welfare by investing in infrastructure for agricultural productivity. This concept was presented in two previous studies, which introduced the theory of techno-economic linear modeling and least-cost design of EWFS. Based on two case studies on rural Zimbabwe and Ghana, both contributions showed the positive effects of sector coupling models on the total system costs.

The first chapter of this paper formalizes the concept model framework of decentralized energy-water-food systems and presents an analysis of their economic feasibility based on least-cost optimization and scenario analysis, the latter based on the variability of interest rate and energy system design. The aim is to analyze the capability of EWFS to provide economic-feasible solutions for rural electrification in contrast with existing state-of-the-art solutions and assess its financial attractiveness for major stakeholders.

The second section addresses the root motivation of this work, the role of electricity access for sustainable economic development, and presents the challenges met by the public and private sector in providing it to the rural communities. Section 3 deals with the EWFS’ concept and the modeling of its least-cost design. Lastly, Section 4 evaluates the economic feasibility of EWFS based on the variability of the weighted average costs of capital and on the change in system design. The scenario development will show that fully fledged EWFS is the most superior system design to achieve long-term economic sustainable development by enabling the access to electricity and water and increasing agricultural productivity with the lowest annual system costs.

“Access to affordable, reliable, and sustainable energy for all” is the seventh United Nations Sustainable Development Goal and a key enabler of economic growth and human development. The clear correlation of higher poverty level with lower electricity access is estimated to catalyze the private and public investment of 6 billion USD per year over the 2017–2030 period towards electrification in SSA. While progress is being made, there are still around 600 million people in sub-Saharan Africa without access to electricity, over 80% of them living in rural areas. Meanwhile, rapid population growth is estimated to offset the electrification efforts in the period up to 2030: more people in SSA would lack access to electricity than today; 90% of them would be living in rural areas.

Decentralized energy-water-food systems are the proposed solution for rural farmers in SSA to provide the necessary amount of electricity that fosters a higher level of human development. It addresses the low purchase power of the local community, gives renewable-based power access as pillar for human development, and increases the income of local community through agricultural productivity. It is based on the water-energy-food nexus, a conceptual framework for integrated resource management, which took particular prominence in 2011 as a wake-up call reacting to the forecast of a worldwide increasing resource demand, climate change, and the awareness of the unsustainable stress on scarce resources (energy, water, and food). As a result, it supports the coordination and management of the three sectors and the decision-making process under the consideration of synergies and trade-offs between the three resources when dealing with human development challenges. This system thinking has from henceforth had an impact on the new policy frameworks, business assessment methods, and modeling tools, specially addressing challenges in the urban context and the multi-sectoral use of energy. However, the application of this approach in the context of rural development of farming communities is limited. Due to the transformational effect of the nexus thinking, it deserves the formalization of a concept framework that is suited for rural farming communities and for sustainable economic development.

Key messages from case study in Kpori, Ghana

This contribution presents an economic analysis of decentralized energy-water-food systems and their capability to provide economic-feasible solutions for rural electrification and thus the potential to enable economic development of the rural population in sub-Saharan Africa. Potential benefits of energy-water-food systems are plentiful:

  • Their decentralized design avoids the financial and governmental obstacles coming with electrification through grid extension
  • Biogas motors as controllable power generators substitute the costly and environmental unfriendly use of diesel generators
  • Although the deployment of water pumps increases the system investment costs, they lead to two major advantages compared to micro-grids without their utilization. Firstly, they are flexible loads opposite to most private power consumers (e.g., light bulbs). The water pumps are powered by cheap solar power during daytime with little or even without use of costly battery storage. Secondly, water pumps are productive power consumers opposite to private consumption, because their utilization enables year-round agriculture, which increases local productivity. Hence the local population is enabled to pay back the investment costs despite their formerly low purchase power
  • The decreased demand of costly batteries and diesel and increased profits from year-round agriculture lead to annual costs of 2 USD for the for electricity and water supply of the community compared to 17,326 USD for power supply just with diesel, assuming WACC of 15% and that the profits from agricultural sales subsidize the power supply

Based on this model results, decentralized energy-water-food systems have shown their potential to enable LCOE below state-of-the-art off-grid systems and local job creation through improved agricultural productivity.

In order to prove the potential of decentralized energy-water-food systems, they must be implemented on-ground including research on the optimal management and ownership structures; professional requirements for its managers, technicians, and farmers; as well as possible investment strategies. Also, the least-cost model shall be improved regarding more detailed modeling of groundwater availability, nutrients in the soil, water consumption of different crops, and biogas digestion of various inputs. After adding these improvements of the model, it shall be disseminated to and used by interested NGOs and social enterprises. Thereby, decentralized energy-water-food systems could prove their potential to improve access to reliable energy, water, and food supply, to create local jobs, and thus to fight extreme poverty of the population in rural sub-Saharan Africa.

Published

February 2019

By

© 2020 The Authors.

Access

Winklmaier, J., Santos, S. A. B., & Trenkle, T. (2020). Economic Development of Rural Communities in Sub-Saharan Africa through Decentralized Energy-Water-Food Systems. In Regional Development in Africa. IntechOpen.

Contact

Stephanie Bilgram
Global Nexus Secretariat

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